Just last month, we wrote about a North Carolina draft proposal that would ease the way via its ethics rules for Avvo and other on-line legal services to operate there. Now, after a joint opinion from three New Jersey Supreme Court committees, the Garden State has turned thumbs down on such law platforms, citing issues including improper fee-sharing and referral fees.

Nix on Avvo, LegalZoom, Rocket Lawyer

The joint opinion bans participation in Avvo’s programs because of the “marketing fees” it collect from lawyers in exchange for participating in two of its offerings: “Avvo Advisor,” in which clients talk to lawyers for 15 minutes for $40, with Avvo keeping $10; and “Avvo Legal Services,” where clients pay a flat fee to Avvo for access to affiliated lawyers, and then Avvo pays the lawyer net of its own fee.

The committees found that this arrangement violates New Jersey’s version of Model Rule 5.4(a), barring fee-splitting with non-lawyers, and it mattered not that Avvo called its cut a “marketing fee”: irrespective of its label, said the committees, “lawyers pay a portion of the legal fee earned to a nonlawyer; this is impermissible fee sharing.” In addition, said the committees, these payments signal a “lawyer referral service,” and payment of an “impermissible referral fee” under New Jersey’s Rules 7.2(c) and 7.3(d).

Icing the cake, the committees also raised a trust account issue, saying that Avvo’s practice of holding the lawyer’s fee until the conclusion of the matter violates the attorney’s duty to maintain a registered trust account and to hold client funds in it until the work is completed.

Avvo wasn’t the only on-line platform tagged — Rocket Lawyer and LegalZoom also were placed off-limits to New Jersey lawyers, but for a different reason. While they do not require payment from lawyers to participate, and do not share the clients’ monthly subscription fees with lawyers, Rocket Lawyer and LegalZoom are “legal service plans” that have not been registered with or approved by the New Jersey Supreme Court, said the committees. That places them outside the pale, even while not violating the fee-sharing prohibition.

A notice to the bar from the supreme court’s administrative office accompanied the joint opinion, listing the 46 state-approved legal service plans, including those offered through unions and government agencies.

What next?

As we’ve noted, the ABA’s Futures Commission sees the continuing onslaught of on-line platforms as something that is here to stay. Nonetheless, this New Jersey ethics opinion joins other cautionary or negative ones issued by regulators in Ohio, Pennsylvania and South Carolina. Against that backdrop, North Carolina’s recent consideration of rule changes may appear to be the outlier (although an Oregon state bar association task force also recently recommended ethics rule amendments that would be friendly to on-line service legal platforms).

Avvo responded to the New Jersey opinion, telling the New Jersey Law Journal that it is “attempting to address the pressing need for greater consumer access to justice, and we will continue to do so despite this advisory opinion.”

Will market pressure become a tsunami that will eventually sweep legal ethics considerations away? It may take awhile to tell, but until then, look for more ethics opinions to come out with differing views, potentially creating a patchwork of inconsistent state approaches. We’ll be watching with great interest.

The only place the lawyer was licensed was Colorado. Nonetheless, according to the Pennsylvania disciplinary board’s report and recommendation, he maintained an office in the Keystone State, and registered that address with the Colorado Supreme Court.

He also held himself out to the public as being admitted to practice in Pennsylvania — namely in his LinkedIn profile, which mentioned his “Pennsylvania law firm,” and the Pennsylvania client entities he claimed to have represented. The profile also falsely stated that the lawyer had been licensed since 2006 to practice in Pennsylvania and also California.

That was a serious problem — in Pennsylvania, as in most states, holding yourself out as authorized to practice when you are not is an independent instance of misconduct (see Model Rule 5.5(b)(2)). It can even be a violation of state statute, like it is in my home state of Ohio.

The lawyer claimed that the false information on his profile resulted from not being “careful in writing” it, and that he had mistakenly cut and pasted information “from his resume” into the profile. The disciplinary board found those claims “not credible.”

Hearing hassle

The LinkedIn problem might have been enough to get the lawyer tagged for the unauthorized practice of law, in violation of Pennsylvania’s version of Model Rule 5.5, and for making “overt misrepresentations” in violation of Rule 8.4(c). But that wasn’t all he did, according to the disciplinary board findings.

In 2014, the lawyer appeared as counsel on behalf of a parent and her minor child at an expulsion hearing held at a Pennsylvania high school. The child happened to be the lawyer’s step-son, but the lawyer never disclosed that. He introduced himself at the hearing as counsel, and when asked for his attorney ID number the lawyer gave his Colorado bar number, but never disclosed before, during or after the hearing that he had never been admitted to practice in Pennsylvania.

The lawyer continued his representation in the high school expulsion matter for the next year, until the term of the child’s school discipline was complete. He then wrote to the superintendent that his “representation of [Child] is hereafter terminated.”

Don’t let his happen to you…

The lawyer in this disciplinary case brought a heap of trouble down on himself. But even if you would never practice where you are not authorized to do so, and would never hold yourself out as being admitted where you are not, this disciplinary case has a few takeaways.

First, police your social media statements, and make sure they are accurate — because they can be a basis for disciplinary trouble. Here’s an article by my LinkedIn buddy, Missouri lawyer Michael Downey, on LinkedIn ethics issues — it’s from 2013, but still well worth reading.

Second, if you get an inquiry from bar disciplinary counsel respond to it, even if it’s just to ask for more time or get clarification. The lawyer here failed to respond for many months, leading to an additional charge of failure to cooperate, which is another independent basis for discipline under Pennsylvania bar rules (as it is in other states, too).

Third, be aware that ethical misconduct can be prosecuted in the state where it occurs as well as in your home jurisdiction, where you are licensed — and as here, your state of licensure will impose “reciprocal discipline” based on a finding of misconduct elsewhere.

On-line service providers are here to stay: Entities like Avvo, Rocket Lawyer and LegalZoom now have a presence in some legal market segments, said Martinez, and “they are not going away.” Lawyers must acknowledge this force, and that “they are no doubt innovating in a way that consumers of justice are paying attention to.” Like attorney advertising, which was once derided but is now ubiquitous, on-line service delivery platforms are “now part of the ecosystem.” The challenge is to ensure that these and other technology-driven models meet the standards most critically important to the profession. The Commission report recommends that state courts adopt the ABA Model Regulatory Objectives for the Provision of Legal Services, so that if and when a court examines on-line or other providers (including lawyers), any regulation is guided by the stated objectives. These include such core principles as independence of legal judgment, protection of confidential and privileged information and accessible civil remedies for negligence and discipline for misconduct.

The public needs more from us: The Commission’s report details a huge unmet need for legal services. In some jurisdictions, more than 80 percent of the civil legal needs of low-income people and the majority of middle-income people go unmet — even as new law graduates struggle to find work. “Our efforts have woefully failed” so far, Martinez said, to meet the goal of providing some form of effective assistance for the essential civil legal needs of all people otherwise unable to afford a lawyer — which is the Commission’s #1 recommendation.

We’re trained to be innovation-averse: Our legal training itself makes lawyers resistant to change, and that threatens to leave us behind. We are trained to look at the past, and to avoid unnecessary risk. The traditional service delivery models that we accordingly embrace constrain innovation, and can limit access to justice. Yet, it is crucial to overcome these barriers. “If we don’t shape the future, others will,” said Martinez.

Despite adverse comment from the rank-and-file, conversation about “ABS” continues: Permitting non-lawyer ownership stakes in law firms (aka “alternative business structure”) has generated much controversy; it is currently barred in every jurisdiction except the District of Columbia (although in the state of Washington, a very narrow form is encompassed under its Limited License Legal Technician program). In 2016, the ABA solicited comments on its issue paper on ABS for law firms, including non-lawyer ownership. Based on a lack of data showing that ABS would benefit the public, and being aware of opposition from some, the ABA recommended continued exploration. According to Martinez, the issue is continuing as a topic of discussion at bar association and court meetings, and those interested are watching developments in the UK, where ABS is growing. What should the burden of proof on the issue be, asked Martinez: that there is “no evidence of harm to the public,” or that there is “evidence of benefit to the public”?

What can be done on the local level? Martinez said that lawyer education aimed at helping lawyers and judges understand the benefits of applying technological innovations to the access-to-justice problem was front and center, and that every bar association should be incorporating a futures component into its long-range planning.

Bottom line: we lawyers had better get on board because like it or not, the future is here, and it holds opportunities for the profession and for increased access to justice.

This is a good one for the law school legal ethics class I’m teaching this semester: If a company’s lawyer approves a policy that may be legal in itself, but the lawyer knows that the company will use it to evade the law, has the lawyer violated ethics rules?

An analogous question arose last week when the New York Times reported that Uber Technologies Inc. used specially-developed software in order to avoid law enforcement stings in cities where Uber’s ride-sharing operation was facing local government opposition.

Within a few days of the report, Uber announced that it had halted the practice, called “greyballing,” which had been used in the U.S. and overseas. Uber said that the practice was part of its broader efforts to halt all rider conduct that violates its terms of use.

However, the situation still provides a setting in which to consider Model Rule 1.2(d) and your ethics obligations if a client seeks your help in conduct that may be deemed to be pushing the legal envelope.

“Greyballing” a potential rider

As reported by the Times, starting in 2014, Uber apparently put policies in place in cities like Boston, Portland, Oregon and Las Vegas to identify users Uber thought might be city investigators or inspectors who were arranging for rides in order to conduct stings on operations that law enforcement officials questioned as violating city regulations.

After facing initial opposition in many cities where gaps in local regulations made it easy to launch its services, Uber eventually reached agreements with cities so that it could operate lawfully.

But before that point, as the Times described it, “law enforcement officials in some cities … impounded vehicles or issued tickets to UberX drivers, with Uber generally picking up those costs on the drivers’ behalf. The company has estimated thousands of dollars in lost revenue for every vehicle impounded and ticket received,” the Times said.

To avoid these costs, Uber would try to identify law enforcement officers and keep them out of its drivers’ cars — “greyballing” them. The digital techniques Uber used to do that included reviewing credit card information to see whether the card was linked to some official institution (e.g., a police credit union), drawing a “geofence” around government offices, and not picking up anyone seeking a ride from there, and searching social media profiles to identify people who seemed to be linked to law enforcement.

When someone who had been “greyballed” did successfully hail an Uber, the company could call the driver in order to end the ride.

What should counsel consider?

Model Rule 1.2(d) bars counseling a client to engage in criminal or fraudulent conduct, or assisting the client in doing so. But was Uber’s “greyballing” program used for unlawful ends? If not, there is no legal ethics issue to discuss. And we certainly do not know what Uber’s legal team considered in advising Uber about the program.

Rule 1.2(d) of course permits discussing with the client “the legal consequences of any proposed course of conduct” and assisting the client in making “a good faith effort to determine the validity, scope, meaning or application of the law.” A lawyer who conforms to that standard is on good ground.

Likewise, comment [9] notes the difference between opining about consequences and “assisting” in unlawful conduct. And the “fact that a client uses advice in a course of action that is criminal or fraudulent” does not of itself “make a lawyer a party to the course of action.” “Presenting an analysis of legal aspects of questionable conduct” is OK; but “recommending the means by which a crime or fraud might be committed with impunity” is not.

Be careful out there…

If you are in a grey area (no pun intended!), where it may be unclear whether you are counseling your client about the bounds of the law or whether you are possibly assisting with improper conduct, it pays to be careful, and to consider getting an outside view about your possible actions. Check your jurisdiction’s version of Model Rule 1.6(b)(4), which permits you to disclose a client’s confidential information as reasonably necessary in order to obtain legal advice about your compliance with the ethics rules.

Law firm cybersecurity is in the news again with two developments. First, the latest ABA TechReport says that large law firms were more likely to be victims of a data security breach last year than mid-size or small firms, with one in seven respondents having been hit overall. That’s a big deal. Next, a federal class action complaint in what is thought to be the first suit attempting to base liability solely on a U.S. law firm’s allegedly inadequate cybersecurity was unsealed on December 9. But that suit possibly turns out not to be such a big deal.

BigLaw take warning

As reported in Law360 (subs. req.), the 2016 ABA Legal Technology Survey collected responses from 800 ABA members, and it showed that 26% of firms with more than 500 lawyers had experienced a security breach. That contrasts with about 15% of firms with 50-99 lawyers, and 20% of firms with 100-499 lawyers. Only 8% of solos said they’d had a breach.

A possible explanation of the data may be what Willie Sutton said about why he robbed banks: that’s where the money is. Large and mid-size firms can be treasure troves for hackers looking to gain access to client info on deals and other financial activity, and law firms can provide “back door” access to the data of financial institution clients. With more lawyers and more staff, larger firms also have more chances to suffer from human error.

The good news there, according to the survey, is that only 2% of respondents reported that hacking resulted in unauthorized access to client data.

Failure to secure data?

On the litigation front, a class action complaint was unsealed against Chicago-based firm Johnson & Bell Ltd., brought by former clients who asserted that the firm’s “computer systems suffer from critical vulnerabilities in its internet-accessible web services.” Plaintiffs also alleged that client confidential information “has been exposed,” and identified the firm’s time-charge system, e-mail server and virtual private network as vulnerable to cyber-attack.

However, the plaintiffs never alleged that any actual breach has occurred, and the firm moved to dismiss the claims. Potential vulnerability is not actionable, Johnson & Bell said in its motion — otherwise “every lawyer who carries a briefcase, takes notes in court or in a deposition … could be subject to being named in a class action lawsuit, because in each instance a client’s confidential information was ‘exposed’ or ‘vulnerable.'”

Counsel for plaintiffs in the suit is Jay Edelson, who has litigated successfully on behalf of consumers against businesses where actual breaches have occurred.

Although expansion of liability against law firms where no actual cyber-breach is alleged would be a scary development, the possibility has fizzled for the moment. As detailed in the district court’s opinion, the plaintiffs acknowledged that the time-tracking system vulnerability was remedied shortly after the complaint was filed, and plaintiffs voluntarily dismissed their class action complaint in order to pursue arbitration under a provision of their retainer agreement with the firm.

Lawyer training = ounce of prevention

Law firm data vulnerability consists of at least two factors — technology and humans. As we’ve pointed out before, a good way to address the human factor is with plenty of lawyer training, because we seem to be particularly prone to falling for scams and clicking before we think. As for the technological factor, staying ahead of the bad guys is always going to be a game of Whack-a-Mole, which law firms will be striving to win.

If you “like” a political Facebook post, or tweet a comment on a controversial legal topic, are you potentially creating an ethical conflict of interest with your clients who may have contrary interests? The District of Columbia bar ethics committee thinks so, and warns about the risk in its Opinion 370, issued late last month.

The position, which the ABA/BNA Lawyers’ Manual on Professional Conduct (subs. req.) called “novel,” is part of an opinion that otherwise accords with the large body of common-sense advice about using social media for legal marketing and personal enjoyment. Opinion 370 weighs in on several frequently-encountered issues, such as protecting client confidences, responding to online reviews and identifying legal specialties.

Positional conflicts?

But the D.C. bar ethics committee is possibly the first to single out blogging, tweeting or commenting as having the potential to raise a “positional conflict” with a client. Such a conflict can arise when a lawyer takes one position and then takes an inconsistent position on behalf of a client. The D.C. committee said:

“Caution should be exercised when stating positions on issues [on social media], as those stated positions could be adverse to an interest of a client, thus inadvertently creating a conflict. [D.C.] Rule 1.7(b)(4) states that an attorney shall not represent a client with respect to a matter if ‘the lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by … the lawyer’s own financial, business, property or personal interest.’ … Content of social media posts … may contain evidence of such conflicts.”

While at least one academic scholar has advanced the idea that blogging can raise such a positional conflict, comment [13] to D.C.’s Rule 1.7 seems to describe the conflict only in connection with taking inconsistent positions on behalf of a client in a matter, where doing so would “adversely affect the lawyer’s effectiveness in representing another client.”

That would seem to rule out the possibility of a positional conflict where a lawyer is simply making a personal expression of opinion using social media, outside the scope of representing a client.

Bad for business…

Nonetheless, the brief warning in the D.C. opinion is valuable in making the point that what you say on-line can put you in an awkward spot with clients or potential clients. Being identified in a high-profile way with a particular position could certainly cause a client to fire you or not hire you. But that may just be viewed as a regular part of today’s legal practice.

When it comes to establishing a policy about what a firm’s lawyers and staff can say on-line, most firm managers avoid a heavy-handed approach. Unless the lawyer or staffer wants to mention a specific client, the social media policies that most firms now have usually simply ask for the use of discretion and good sense, without stifling personal expressions of opinion — and that’s the way it should be.

Note: My co-editors and I are thrilled that the ABA Journal has honored The Law for Lawyers Today as one of this year’s 100 best blogs! Read the magazine’s announcement here. We promise to keep bringing you fresh and lively news and comment every week from “Legal Ethics World.”

Alaska may have only about 2,500 active resident lawyers, but its bar ethics committee has become just the second authority in the country to weigh in on the practice of “bugging” the e-mail of opposing counsel. The committee disapproved of this spy method in an opinion issued in late October, saying that it violated the Last Frontier’s version of Model Rule 8.4, which prohibits dishonesty and misrepresentation.

Don’t let this bug you

A “web bug” is a tracking device consisting of an object embedded in a web page or e-mail, that unobtrusively (usually invisibly) reveals whether and how a user has accessed the content. Other names for a web bug are web beacon, pixel tracker and page tag.

I had never heard of web bugs before, but apparently they are universal in the Internet world, enabling e-newsletter editors, for example, to get metrics on how many readers open the newsletter, and what pages they look at. But web bugs can be used for less benign ends, including getting a leg up on opposing counsel.

As described by the Alaska opinion, web-bugging involves placing a tiny image with a unique website address on an Internet server, and dropping a link to that image into the bugged e-mail. “The image may be invisible or may be disguised as a part of the document (e.g., part of a footer.) When the recipient opens the document, the recipient’s computer looks up the image and thereby sends certain information to the sending party.”

The information available from a web bug is wide-ranging, including:

when and how many times the e-mail was opened

how long it was reviewed (including whether it was in the foreground or background)

whether the recipient opened attachments

how long the attachment or a particular page of the attachment was reviewed

whether and when the e-mail and/or attachment was forwarded

the approximate geographical location of the recipient

Web bugs are different than meta-data (which has been the subject of many ethics opinions). Meta-data is automatically a part of documents created with word-processing programs, unless the user scrubs it. In contrast, bugging e-mail that you plan to send requires an affirmative act.

According to the opinion, web bugs operate surreptitiously, and “it cannot be said with any assurance that [existing] detection programs will be consistently effective” in detecting them.

“Unwarranted intrusion”

The Alaska ethics committee determined that using web bugs to track e-mail sent to opposing counsel “impermissibly and unethically interferes with the lawyer-client relationship and the preservation of confidences and secrets,” and it represents an “unwarranted intrusion into the attorney-client relationship.”

For instance, knowing how long and how often your opposing counsel has viewed a bugged e-mail can unlock information on how important the communication is deemed to be. In litigation, a web bugged document could provide valuable insight on which pages of a settlement agreement got the most attention. “This gives the sending lawyer access to attorney-client protected information and extraordinary insight as to which sections of a document the lawyer and her client found most important,” the committee concluded.

Using technology to accomplish such purposes, said the committee, violated Rule 8.4 even when its use is disclosed and not surreptitious.

It should be self-evident to any lawyer who has taken a law-school ethics course or an ethics CLE that bugging e-mail sent to opposing counsel is dishonest. As technology offers more ways to obtain an improper advantage over an opponent, ethics regulators will play Whack-a-Mole in finding those methods to be unethical. But it’s discouraging that such efforts are even needed.

LinkedIn last week announced a “rethinking” of its endorsement feature, first launched in 2012. Starting with its mobile app, the service says it has “improved targeting,” so people looking at your profile will see the endorsements for you that are most relevant to them. Coming on the heels of this development, a new Ohio ethics opinion reminds us that we should be monitoring endorsements and other kinds of testimonials to ensure they are within ethical bounds.

LinkedIn endorsements — power of suggestion

According to LinkedIn (which has achieved near-universal penetration of the lawyer user market), more than 10 billion endorsements have been shared on its platform in the last four years. For the uninformed, in LinkedIn-speak, an “endorsement” results from one of your connections clicking a link on your profile page, saying that you have “skill” in a list of areas that you have created and pre-set. For instance, 50 people might say that you are skilled in “legal research,” and their little profile pictures (if they have them) are arrayed next to the endorsement.

Apparently, LinkedIn (which was acquired this summer by Microsoft) will now harness the power of its millions of users to calculate which of your skills would be most relevant to someone searching for you.

Clearly, endorsements can spotlight your particular accomplishments and skill set, but of course they come with some ethics considerations to be aware of.

Trust, but verify

First, you are responsible for monitoring testimonials and reviews of clients that are posted on websites that you control, as Advisory Opinion 2016-8, issued October 7 by the Ohio Supreme Court’s Board of Professional Conduct points out.

The Board said that websites that permit clients and others to “endorse” a lawyer are advertisements, and lawyers must ensure that they comply with the Buckeye State’s versions of Model Rules 7.1 and 7.2. In particular, “false, misleading, or non-verified testimonials in the form of client comments or endorsements should be removed by the lawyer when he or she has control over the content of the profile.” (Ohio’s rule imports from its prior Code of Professional Responsibility the prohibition on claims that are nonverifiable, i.e. not capable of being factually substantiated.)

So, if you have listed yourself on your LinkedIn profile (which you do control) as having skill in “Tax Law,” and a client “endorses” you for that skill, and you indeed have that skill, you presumably are within the bounds of good ethical practice. (Don’t scoff at this seemingly-self-evident proposition. Some lawyers in South Carolina got in ethics trouble when their marketing company set up a website that claimed skillsets that they didn’t have.)

But if you set up your LinkedIn skill section to invite endorsements for being the “World’s Greatest Corporate Advisor,” that presumably would not be ethical, at least in Ohio, since such a claim would be non-verifiable. And if you set up the section to claim skill in tax law but, like me, barely got through your law school tax course (thanks for the courtesy C+, Professor Lou Geneva), then you are definitely outside the bounds.

Second, if you accept endorsements and always “endorse back” the person who has endorsed you, you should think about your state’s version of Model Rule 7.2(b), which says that “A lawyer shall not give anything of value to a person for recommending the lawyer’s services…” with some non-relevant exceptions. If you make your own endorsement contingent or conditional on receiving one in return (or vice versa), then you would potentially run afoul of Rule 7.2(b). Quid pro quo endorsements are obviously ethically suspect, as my St. Louis-based ethics friend Michael Downey points out in this 2013 interview.

Know the rules of your road

LinkedIn endorsements are optional — I simply haven’t set up my own profile to accept them, for instance. But if you like endorsements for their potential to inform people about you and your skills, be aware of your jurisdiction’s rules and ethics opinions on the subject, and use endorsements wisely.

Avvo has a First Amendment right to use a lawyer’s publically-available information to generate advertising revenue for itself, the district court for the Northern District of Illinois held on September 12.

then, Avvo collects a fee from lawyers to allow them to put ads for their practices on the profile pages of lawyers who don’t pay the fee — and the lawyer profiles where the paid ads appear are those of head-to-head competitors;

then, if you are the target of this shake-down tactic, you can pay a fee to keepAvvo from putting ads for your competitors on your profile page.

Nice, right?

“Non-commercial” speech

And it’s all protected by strict constitutional scrutiny as non-commercial free speech, said the district court, in dismissing the putative class action of an Illinois lawyer who said that Avvo’s gambit violated state law by using his identity for commercial purposes without his permission.

In granting Avvo’s motion to dismiss, the district court said that

[T]o hold otherwise would lead to the unintended result that any entity that publishes truthful newsworthy information about individuals such as teachers, directors and other professionals, such as a newspaper or yellow page directory, would risk civil liability simply because it generated revenue from advertisements placed by others in the same field.

The court viewed the Avvo site as a mere directory, and analogized it to Sports Illustrated magazine: just like the magazine has editorial content plus ads, the Avvo site has non-commercial speech consisting of the lawyer profiles — plus ads. The court reasoned that just as ads do not convert the entire magazine into commercial speech, Avvo’s ads do not “turn the entire attorney directory into commercial speech.”

Money train

So the Avvo juggernaut rolls on. In August, reports Bob Ambrogi’s Law Sites, “a California lawyer dropped his putative class action against Avvo after Avvo brought a motion to strike the complaint under California’s anti-SLAPP law.” Avvo has also successfully torpedoed a 2007 federal class action complaint in Washington and a suit filed in Florida that was later transferred to Washington.

Ambrogi quotes Avvo’s chief legal officer on the company’s win: “This is further validation that publishers like Avvo needn’t obtain the consent of their subjects prior to exercising their First Amendment rights,” said Josh King.

As I reported in February, Avvo has taken my Ohio bar information, found a picture of me (though it is a gorgeous one, I must say), and put up my profile, all without my permission. And there are still four ads for other lawyers on my profile page– so Avvo continues to use my data to make money for itself. No phone book or lawyer directory that I know of has Avvo’s rapacious business model. But as long as courts continue to see Avvo as a mere phone book — or worse, a magazine — it will continue to expand its empire at the expense of lawyers who won’t play along.

You know those e-mails out of the blue that start “We would like to engage you to handle our $1 million legal matter”? From our friends over at Lawyerist.com comes a description of what happened when Steven Chung, an L.A. tax attorney, actually took the bait and pursued one of those invitations.

Chung’s story is headlined, “Dear Lawyers, if a client you never met sends you $350,000, it’s probably a scam” — and of course it was a scam, although the tale ends happily, and Chung avoided getting ripped off.

Set-up for a scam

Here’s how it unfolded: The “client,” supposedly located in an Asian country, asked for representation to file a visa application for an executive who needed to work in the U.S. Chung asked for a retainer in advance; the potential client asked for an engagement letter.

In the meantime, Chung started digging around, and several things didn’t check out:

although the company was apparently real, its purported e-mail address was a Gmail account that anyone can open for free;

the “executive” had a LinkedIn profile, but had only four connections, none of whom were connected to the company;

other websites did associate the executive with the company, but again, the potential client could have set those up.

With his Spidey sense tingling, Chung turned down the work and thought that would be the end of the matter. Instead, the client dangled some more bait: $350,000 that Chung would receive from one of the company’s customers “from an unpaid invoice,” and from which Chung would be able to deduct his fee. At that point, Chung writes, he “shifted from wariness to the full-fledged realization that this was a scam.” Chung decided to ignore the communication.

Then, a check for $350,000 arrived in the mail. It certainly didn’t check out:

The return address was from California — but the envelope bore non-U.S. postage.

The check was drawn on the Bank of Nova Scotia, though the business had no presence there (and many check scams seem to use Nova Scotia banks).

Temptation…

Chung writes that it was “hard to ignore my name attached to the receiving end of a $350,000 check,” but if he had cashed it, it “could immediately be returned for insufficient funds, at which point either the sender would make an excuse, or possibly accuse me of stealing money and try to blackmail me. Or the check would be placed on hold by the bank and in the meantime, either the sender or the potential client would ask that I repay them immediately before the check cleared. Assuming I had a spare $350,000, that money would be transferred and likely never be seen again after the check bounced. Worst of all, I could have transferred existing money in my trust account, which can result in ethics violations.”

Chung didn’t fall for it, but he kept the check as a memento.

How to avoid the peril

Last year, we wrote about an ethics opinion from the Association of the Bar of the City of New York, which identified an ethical duty to exercise “reasonable diligence” in avoiding internet-based scams like this. That is certainly an opinion to take to heart, because of the potential for client harm, as well as the obvious downside to you and your firm.

Chung did well to unmask the scam. You, too, can avoid being a victim. We agree with Chung’s advice:

Just say no, and don’t respond to unsolicited requests for legal representation.

If you do respond, “make sure that their documents match their stories.”

“Don’t be afraid to ask the tough questions.”

“Finally, and most importantly, do not send any money until all checks clear. Don’t be afraid to wait for an extended period.”

Although Chung did not opt to report the scam, you should consider doing so if you find yourself faced with one. You can report suspicious e-mails to the FBI’s Internet Crime Complaint Center (www.ic3.gov).

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The Law for Lawyers Today is a resource for law firms, law departments and lawyers needing information to meet the challenge of practicing ethically and responsibly. Here you’ll find timely updates on legal ethics, the “law of lawyering,” risk management and legal malpractice, running your legal business— and more.

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